Washington’s century-old fuel tax is going up again. 

On July 1 the gasoline tax will rise by 6 cents a gallon, the first increase in nine years for the primary revenue source sustaining Washington’s transportation system.

The hike is the most prominent piece of a six-year, $3.2 billion package passed by the Legislature and signed by Gov. Bob Ferguson earlier this year. 

Lawmakers turned to the tax to contend with a projected $1 billion shortfall in the next two-year transportation budget. Officials said this was caused by an inflation-fueled surge in construction costs and flattening gas tax receipts as more drivers opt for electric vehicles and as cars have become more fuel efficient.

“This will keep projects on track and ensure the promises we’ve made can be kept,” said Sen. Marko Liias, D-Edmonds, chair of the Senate Transportation Committee. “As you drive around and see those orange cones, that’s where your money is at work.”

The increase will push the state’s per-gallon tax rate on gas and other vehicle fuels from 49.4 cents to 55.4 cents. Starting July 1, 2026, it will rise each year by 2% — about a penny annually — to account for inflation.

The state tax on diesel will also climb an additional 3 cents, so 9 cents total, to 58.4 cents, then go up another 3 cents two years later. That additional 6 cents applied to diesel will be subject to a 2% boost each year starting July 1, 2028.

Washington now has the nation’s third-highest state gas tax behind California and Pennsylvania. Connecticut is currently at 52.4 cents, according to the Federation of Tax Administrators.

Washington’s state tax is on top of federal fuel taxes, which are 18.4 cents for gasoline and 24.4 cents for diesel.

Hiking the gas tax is expected to raise $1.4 billion over the next six years. The diesel tax is counted on to bring in $166 million over that time.

These increases are two of the larger entrees in the transportation package’s smorgasbord of new taxes and higher fees.

Under the legislation, passenger vehicle weight fees are going up a few dollars. The added sales tax for vehicles will climb from 0.3% to 0.5%. 

There’s also a new 8% tax on the portion of the selling price of vehicles above $100,000 and a 10% tax on non-commercial aircraft sales above $500,000. 

There’s a temporary increase in the rental car tax as well, from 5.9% to 11.9%, before moving down to 9.9% in 2027.

And there’s more.

The tire disposal fee will go from $1 apiece to $5 apiece. Washington State Ferries will boost its vessel replacement surcharge by 50 cents in October and start imposing a 3% fee for those who pay with credit cards next year. 

This week’s increase in gas and diesel taxes may not be immediately noticeable.

The state collects those taxes before fuel gets pumped. They are paid by the distributor — the business that buys or imports gasoline and transports it to the neighborhood gas station. Distributors will decide how they pass their costs onto the station owner, who must decide if they will pass on any added costs to customers. 

Washington created a motor vehicle fuel tax in 1921. It applied to special fuels, too, according to the state Department of Licensing.

The last gas tax boost totalled 11.9 cents and anchored the Connecting Washington transportation package passed by the Legislature in 2015. It led to increases of 7 cents per gallon in July 2015 and 4.9 cents a year later. 

Washington gas prices are higher now than a year ago. The average price of a gallon of regular gas was $4.45 on June 27 compared to $4.33 in 2024, according to AAA. Nationally, the average price was $3.20 that same day.

Critics of the state’s Climate Commitment Act, which requires refineries and other businesses to pay for their air pollution, say that law has pushed up gas prices in recent years.

This story is republished from the Washington State Standard, a nonprofit, nonpartisan news outlet that provides original reporting, analysis and commentary on Washington state government and politics.